But the city hasn't yet reached final agreements with R.H. Macy & Co., the second department store anchor, or the Connecticut developer who will build the MacArthur Center project, Andrews said.

Norfolk Development Director Robert Smithwick would not say whether the project would proceed without Macy's.

"Nordstrom's decision is the first step to breaking ground," said Andrews, who made the announcement at a meeting of the Norfolk City Council. "We believe the other pieces will come soon."

As envisioned, the three-story, 1.2 million-square-foot mall will include a third anchor department store, national retailers, bars, restaurants, a multiple-screen movie theater and two parking garages, said Judy Begland, assistant director of development for the city.

It will be built on 17 acres used for parking near the MacArthur Memorial and Scope. The site is bounded by City Hall Avenue, Freemason Street, Monticello Avenue and Cumberland Street.

The project will provide 3,000 jobs once the center is fully leased, according to the city's development department. Construction will employ 1,500 people.

Nordstrom, which will face the MacArthur Memorial, will occupy 180,000 square feet, said Begland. Macy's will occupy 230,000 square feet. The third department store tenant has not been determined. "It's wide open," Begland said.

MacArthur Center will draw people from as far away as Richmond and North Carolina, Begland said. "We haven't viewed it as a downtown shopping center," Begland said. "We've seen it as a regional central shopping center."

She said 1.7 million people live in the market area for MacArthur Center, which will be 100,000 square feet larger than Hampton's Coliseum Mall, the Peninsula's largest mall.

"It will solidify the region as a major center on the mid-Atlantic Coast," Begland said.

Greenwich, Conn., developer Alexius C. Conroy, president of The Conroy Development Co., is putting up $174 million to build the project, Begland said.

The remaining $96 million will come from city, state and federal governments.

The city of Norfolk will kick in $63 million to build a parking deck for 4,400 cars, provide utilities and realign streets, said Begland.

The city plans to issue $50 million in parking revenue bonds to pay for the deck and about $10 million in general-obligation bonds to pay for the utility and street improvements, she said.

Another $3 million will come from state highway funds, utility revenue bonds or the state's economic development fund, she said.

In addition, the Norfolk Redevelopment and Housing Authority is now applying for a $33 million community development block grant from the Department of Housing and Urban Development, she said.

Construction is scheduled to begin in December 1994 and the mall should open in spring or summer of 1996, Begland said.

The city predicts MacArthur Center will have a positive cash flow of $1.4 million after payments on the debt in its first year. After 10 years, the city will have collected a total of $40 million in sales and real estate taxes, Begland said.

Conroy Development will own MacArthur Center, but Norfolk Redevelopment and Housing Authority will retain ownership of the land and lease it to Conroy. The city will own and operate the two parking garages.

Smithwick said he began courting Nordstrom in 1988. "Technically, we were turned down six times," he said.

Last May, Smithwick said, he went to Nordstrom's Seattle headquarters thinking he and David Mackie, vice president for real estate, could seal the deal.

Instead, Mackie told Smithwick that Nordstrom had decided against the plan.

Smithwick said as a last resort he asked Mackie if Norfolk could make a full presentation to the executive committee of Nordstrom.

After Mackie agreed, Smithwick said, his department created two videos and on Aug. 26, Smithwick, Norfolk Mayor Mason C. Andrews, City Manager James Oliver, developer Conroy, the executive director of Norfolk Redevelopment and Housing Authority David Rice and other staffers went to Seattle.

They were armed with market research commissioned by the Daily Press that showed Hampton Roads had more residents in the age and income group of the typical Nordstrom shopper than Portland, Ore., where the chain already has a presence, Smithwick said.

"They liked the demographics," he said.

Those people will spend $2.4 billion on women's and girls' apparel, shoes and accessories, which make up most of Nordstrom's sales, Smithwick said. If Nordstrom got 10 percent of that market, it would have $100 million in sales at the Norfolk store.